Breaking Down Your Hidden Factory
Throughout this short journey of KPIs and unlocking your Hidden Factory, we’re going to provide tips, calculations, and next steps to unlocking your Hidden Factory to begin getting better results.
Have you ever heard of OEE? Of course, you have. But are you monitoring it closely along with OOE, TEEP, and other foundational KPIs?
These are common metrics helping operations like yours reach their continuous improvement goals and pushing them a little closer to OPEX (operational excellence). Not only are we going to look into utilizing the most of your machines and shifts, but we will look at how to get the most capacity out of your plant as a whole.
A Hidden Factory is a part of your operation that represents all of its untapped capacity potential; which is the maximum amount of additional production that your plant can handle. Unlocking all of the Hidden Factory would mean that you are running perfect parts 24/7 with no unscheduled downtime. We know this isn’t possible in reality, so we strive to get as close as possible.
The ‘Hidden Factory’ can be exposed and higher achievement unlocked when utilizing these KPIs among others leading your industry. First, let’s dig into what some of the key metrics are, what they mean for your business and how to calculate each of them.
OEE:
OEE has become an industry-leading KPI to get the most out of your machine uptime. This metric is made up of key data points such as Availability, Performance, and Quality. By multiplying each of these measurements, (with availability only considering planned production time) it gives you the overall effectiveness of your equipment. OEE is the primary gauge for how productive your planned production time is as a percentage.
OOE:
Known as Overall Operations Effectiveness, this KPI includes total operations time within a given shift and how productive that time is. Unscheduled downtime included in this KPI allows for deeper insight into how your organization is handling time or tasks that may be unexpected. This can also test how well your team is able to handle diverse problems that may pop up during production. You can find your OOE by multiplying Availability, Performance, and Quality (with availability being Actual Production Time/ Operating Time).
TEEP:
TEEP or Total Effective Equipment Performance is a higher level operations KPI that gives insight into how well you are performing during all of your available time; this is 24 hours a day, 7 days a week, 52 weeks of the year. Meaning, this is a direct percentage of how productive all of your plant’s time is. This measurement is the true Capacity of your manufacturing operation and takes into account both Equipment and Schedule losses (by using OEE and Utilization). TEEP is calculated by multiplying OEE by Utilization, giving you a percentage value on your entire plant productivity.
What’s the Difference:
While these 3 KPIs each offer a unique perspective on productivity, here’s what we mean: The difference between each of the KPIs comes down to the definition of Availability in each measurement. OEE acts as a very granular monitoring KPI for productivity of the machine, only reporting on data during uptime or scheduled production time. OOE takes into account the productivity insight of planned and unplanned downtime during a shift or day. Finally, the TEEP KPI incorporates all available time, allowing you to get a higher perspective on how well you are utilizing your plant capacity over the long-term.
The 4 major losses are also key components that need to be tracked and managed effectively. With KPI Dashboards, your plant is able to identify which of these losses are costing you the most and potentially unlocking more of your Hidden Factory.
Four Common Losses:
You can look at these losses in several ways: as Part or Unit Losses, Time Losses, Percentage Losses, and even Monetary Losses. These can easily have specific KPIs tied to each (examples: Scrap/ Rework, Customer Complaints, Corrective Action Costs, First-Pass Rate, OEE, OOE, TEEP, Throughput, Planned production time, Unplanned Downtime, etc.) in order to alert you on deficiencies, monitor production, and improve cycle times.
Narrowing down a Hidden Factory is hard work and takes much consistency to identify and improve upon your findings. As a direct representation of the capacity of your operations, identifying Hidden Factories allow you to minimize capital expenditures, maximize production, and improve quality. There is no “one size fits all” when it comes to finding exactly what is slowing down your production, so most commonly, all areas of production need to be analyzed.
Identifying a Hidden Factory or a given part of one to tackle in your continuous improvement plans is subtle, but certainly identifiable. Here are just a few examples of Hidden Factories in real-world applications:
Calculating How Your Hidden Factory is Draining Your Plant
The calculation for pinpointing bottlenecks in the Hidden Factory is quite easy, if you are already tracking the right foundational KPIs (see our KPI Matrix).
Calculation:
Using Digital Transformation to Address Hidden Factories
By understanding each of the loss definitions, calculations, their supporting KPIs and importance, you are able to easily identify and expose parts of the Hidden Factory. The benefits of tapping into a Hidden Factory are astronomical and can include: spreading your fixed costs across higher production volume, increased quality and first-pass rates, increased flexibility or agility, improved capacity planning, and boosting throughput on existing assets instead of spending capital on more equipment. Through new technology that will alert you when a parameter boundary is crossed or a KPI control limit is broken, you can faster approach issues and implement solutions. Incorporating industry-leading KPI dashboards will help you track, trend, monitor, compare and improve your ongoing operations. Identifying incremental improvements over time has helped industry-leading manufacturers adapt and scale with the digital age. Digital innovation such as IoT, AI/ Machine Learning technologies, along with Hybrid Systems are helping organizations take advantage of the data they are producing to give profitability a boost, control quality, and accomplish their continuous improvement goals.
If you would like to learn more about the types of losses, KPIs, the Hidden Factory or have other questions about operational excellence, please contact us directly here with your questions.
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